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Sun and Sparc licensee Fujitsu, which with partner Siemens sells its own Sparc-based Solaris servers, are reportedly talking about converging their two Sparc server lines. This would allow them to cut costs and better compete against rivals IBM and Hewlett Packard in the lucrative but fiercely competitive Unix server market.

A Sun-Fujitsu tie-up would probably not affect Sun's low-end or midrange product line, but there would be some interesting possibilities. Sun could, for instance, keep working on its "Gemini" and "Niagara" blade server processors, endorse the 64-bit Opteron on midrange products running Solaris and Linux, and rebadge and resell Fujitsu-Siemens PrimePowers at the high-end.

No matter what Sun does, it will almost certainly support its existing Sun Fire line for a very long time and will continue to roll out UltraSparc-IV processors next year and the year after for customers who want to stay with the Sun Fires.

Industry experts have long believed that Sun should do exactly this kind of partnership with Fujitsu Siemens. It is too expensive for either Sun or Fujitsu to shoulder their Sparc development burdens alone, and they end up competing for Solaris money, instead of using Solaris to beat out AIX or HP-UX.

Fujitsu Siemens has been keen on the idea for years too, especially when it was rolling out powerful Sparc64 processors while Sun was delayed with the UltraSparc-IIIs. In July, Fujitsu ruled out a bid for taking over Sun, which had a market capitalization of about $11 billion. Over the next few months, Sun's market cap rose to $15.5 billion, making it too expensive for Fujitsu, which has its own financial struggles, to swallow at all.

However, a merger of the two companies - really three, if you count the Siemens IT unit - might be something on the negotiating table. And if not an outright merger of Fujitsu and Sun, then maybe a single Fujitsu-Sun-Siemens IT hardware company might make the best sense of all, with all three parties sharing in the profits and the engineering costs.

The possibilities, as Fujitsu's ads say, are infinite. But time in the computer racket is not, so Sun, Fujitsu and Siemens had better get cracking.

Source: Computerwire/Datamonitor

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Sun and Fujitsu to combine Unix server businesses - report

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